Financial advisor firms say they’re in growth mode, and many of them are well on their way to achieving or surpassing their goal, according to a survey by business management consulting firm The Ensemble Practice.

During this year’s first half, firms participating in the survey said they had a median growth in assets under management of 13.7% and a 6% growth in client relationships.

The mid-year survey, which included 52 firms with an average of $1.4 billion in AUM, also found that the fastest growing firms grew their AUM in the third quartile by 17.6%. Survey participants included members of The Ensemble Practice and alumni of the firm’s development program, the G2 Leadership Institute.

The survey posited that much of the growth experienced by advisor firms was fueled by robust market returns. It noted that the S&P 500 Index returned 14.4% in this year’s first half.

Regarding client relationship, the survey found that the typical firm added a median of 41 new relationships, representing 7.3% growth in the number of clients. It also showed that the typical firm lost a median of seven clients, or a reduction of 1.3% of their client base.

Furthermore, new business development activity doubled the rate of growth observed in 2020, the survey found. The Ensemble Practice noted this could be a sign that investors are once again becoming interested in working with an advisor and that the business environment is returning to normal.

And while there were no layoffs in this year’s first half among any of the participating firms, the survey found that 48% had resignations. However, 54% of the firms hired staff to replace departures. Of note, 63% of firms have hired for new positions, and half of them increased their headcount.

As for equity changes, the survey found that internal transactions between existing owners are more common than mergers and acquisitions, with 33% of firms having completed a transaction between existing partners or owners. Twelve percent of firms added a new partner or owner, and only 2% of surveyed firms sold equity or acquired a practice.

First « 1 2 » Next